Capital class 1 notes

Introductory remarks

Why Capital, why now? Over the last two years we’ve witnessed a relative sea change in the political landscape in general, and in the left or progressive movement. The popularity and visibility of socialism has intensified and many are looking for alternatives to the current political and economic order.

There has been an increase of membership in radical and progressive organizations and parties, and a surge in activism. There are new people involved, many who have come to politics on their own or through the internet. There is thus a sort of disconnect between theory and practice. At the same time, the theories that inform many organizations and activists are disconnected from Marxism, something that the PSL calls the “break in ideological continuity.” There is a great piece on LiberationSchool.org about this that you should check out.

So we decided to hold this class, and then we decided to open it up to people online through LiberationSchool. This will be a tricky situation to navigate, because we want to do our best to encourage participation and discussion. If you are online, and you have a question or a comment you want to make, use the chatbox provided on the app or send a tweet with #capitalclass. Our hope is that there can be several discussions happening, and that discussions will not be limited to this period of time but can extend more generally.

If you have a question, or something you really want to address or raise, please let us know now, or ideally e-mail the contact person Dylan before class begins. If there is something we cover that you don’t understand, please let us know and we will go over it again. You can also call on others online to help. Don’t be shy, intimidated, or embarrassed.
Prefaces/afterwords:

English translation: Translated initially by one of Marx’s comrades, Moore, and when he couldn’t do it quickly enough they recruited Aveling, the husband of Marx’s daughter Jenny (or Eleanor).

Engels & Marx are always apologizing for the difficulty. Here Engels is noting that every new science needs technical terms. Political economy up until this point used terms from imported from commerce and industry, which lacked specificity and therefore covered over certain processes.

He notes it is “the Bible of the working class,” a widely read book.

First German edition: “Every beginning is difficult holds in all sciences,” Marx says, and it is the same here. There is a level of abstraction that is necessary, but otherwise it isn’t too difficult he claims. He notes that he treats people only as personifications of economic categories “embodiments of particular class-relations and class interests… My standpoint… can less than any other make the individual responsible for relations whose creature he socially remains” (21). He will come back to this again and again.

This is an important political point. Marx doesn’t do personality politics or make exceptions out of good-natured capitalists. He is concerned with the economic systems that shape and constrain people, because it is the former that have to be changed.

Second German edition: Marx gives a history of political economy, showing that class struggle enables his theory. If you believe capitalism to be the end, you can’t understand it because you can’t grasp it as a developing system or process.

The working class has particular interests that allow us a unique vantage point (this is later called standpoint epistemology). “So far as such criticism represents a class, it can only represent the class whose vocation in history is the abolition of the capitalist mode of production and the final abolition of all classes—the proletariat (25-6).

A note about inquiry v. presentation. Presentation is neat and linear, inquiry is not. His dialectic is different from Hegel, because for him the brain—the idea—transforms into an independent subject and impacts the real world. For Marx, by contrast, the ideal is the reflection and translation of the real world (29).

Chapter 1: Commodities

Wealth of capitalist societies presents itself – or appears as – an “immense accumulation of commodities,” which is where we start.

What is a commodity?

Alien, outside of us, satisfying wants. Marx doesn’t care about this (nature of use-value) – this is the work of history. Why doesn’t Marx care? Too contingent & qualitative, has to abstract from it.

What is a use-value (UV)? It has a utility, a social usefulness. These are realized through consumption. In the form of society we are about to consider, commodities are also depositories of exchange-value. This means that a commodity need not have an exchange value always, it is just so under capitalism.

Exchange-value (EV): quantitative relation. It is only the mode of expression, the “phenomenal form,” of something contained in it, yet distinguishable from it. (45).

in order for two different use-values to be exchangeable they have to be reducible to a third thing.
This third thing cannot be a natural, chemical, or geometrical property. “But the exchange of commodities is evidently an act characterized by a total abstraction from use-value” (45).

Unity of opposites: “As use-values, commodities are, above all, of different qualities, but as exchange-values they are merely different quantities, and consequently do not contain an atom of use-value” (45).

What is common in commodities? They are values (V)—the products of human labor in the abstract (So, Marx tells us that commodities are presented as wealth under capitalism on the first page, but very quickly see that it is really labor!).

How do we measure value, or determine its magnitude? Not by the quantity of labor spent—if this would be so, a pen that takes a long time to make would have more value than one that it takes a short time to make, and you could make something more valuable by working on it more slowly.

Rather, value is socially-necessary labor-time. “The labour-time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time” (47). This is determined by skill, science, application of science, education, social organization of production, workplace organization, means of production, physical conditions, etc.

Something can be a UV without having V – air, soil, meadows. Something can be UV and product of human labor w/o being commodity (e.g., when I make a scrapbook for my friend).

A commodity has to be produced for exchange (social UV).

Note: EV is different from V, but is only way V can be expressed. But Marx will often use them interchangeably.

Two-fold character of labor:

UV are qualitatively different, and so too are the kinds of labor embedded in them. But UVs don’t confront each other directly as UV, but as EV. This is abstract labor.

There is a side note here about labor as an eternal necessity. Labor isn’t a commodity—only Labor-Power (LP).

“The value of a commodity represents human labour in the abstract, the expenditure of human labour in general” (51). This abstract labor-power is “simple” not “skilled” (which Marx reduces to simple).

Value is a relation. In other words, you can have decrease value with an increase in the quantity of commodities. This is the case when the productivity of labor is raised, through technology, organization, education. If productivity decreases, if there is a strike or supply chain disruption, for example, then the commodities will decrease but the value of each commodity will increase (in general).

The form of value:

Again, value isn’t a material thing but a social relation. “The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition. Turn and examine a single commodity, by itself, as we will, yet in so far as it remains an object of value, it seems impossible to grasp it.” (54).

Money is a form of value that is common to everything, and Marx is going to show us how it comes into being. This is important because, as we will see clearly in the last section, money has a way of mystifying and hiding social relations and labor.

This section is difficult and tedious, but ultimately Marx is showing how money arises out of exchange. The only way you can know the value of one commodity is through ideally or actually exchanging it with another commodity.

It isn’t possible to express the value of linen in linen. For that, we need something else, a relative commodity. 20 yards of linen=1 coat. Linen is equivalent form, coat is relative form. Equivalent form (coat) expresses the value of the relevant form. (55).

The relative value of something may change while the value of the commodity remains the same. In other words, an increase in coat production will mean the same amount of linen is worth more coats, but the value of linen itself hasn’t changed. (61)

The relative commodity expresses the value of the equivalent commodity. This is a contradiction of sorts, because it means that one thing is the expression of something totally different from it. So there is a social relation at the bottom of it (63). The private labor of one individual has a social form. (an attack on liberalism)

In order to see this, however, we have to have a legal kind of equality. On page 65 Marx says this is what prevented Aristotle from fully grasping labor as the basis of exchange-value. This is an example of materialism: the social relations of slavery prevent thought from advancing.

The universal equivalent arises out of this explanation by Marx. It is the universal value-form, it happens when a commodity serves the exclusive function as a form of value. It cannot be a relative and equivalent form, for that would be a tautology (1 dollar = 1 dollar).

“A commodity appears at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.” (76).

“A commodity is therefore a mysterious thing, simply because in it the social character of men’s labour appears to them as an objective character stamped upon the product of that labour; because the relation of the producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves, but between the products of their labour [things]” (77). When we enter into a store, we spontaneously think we are interacting as private consumers with a series of goods, but we are actually interacting with the international working class who has designed, produced, packaged, transported, etc. the commodities.

Private laborers don’t come into contact with each other except in exchange—this is why the character of the labor is necessarily hidden.

The myth of individualism and liberalism: Robinson Crusoe. He brings with him commodities and the framework of capitalism to the island. So this can’t explain capitalism.

Capitalism masks personal dependence and interdependence. This is important because it shows how fetishism arises out of capital itself. It isn’t just propagated through the media and the schools, but has an economic foundation.

Marx turns to a vision of communism:

“Let us now picture to ourselves, by way of change, a community of free individuals, carrying on their work with the means of production in common, in which the labour-power of all the different individuals is consciously applied as the combined labor-power of the community” (83)

The total product is a social product, and there has to be some division: means of production, means of subsistence, and we have to distribute it somehow.

This will happen according to a “settled plan,” not spontaneously through co-ops (84).

Chapter 2: Exchange

This is a transition chapter that is setting the stage for the chapter on money. Marx is going to show how money arises out of commodity exchange.

How does exchange happen? Marx is setting up the liberal vision of the free market because he wants to critique political economy on its own terms.

We are personifications of the economic relations that exist between us (89). We each come to the market as owners of our commodities and freely consent to exchange.

Contradiction: Commodity needs to be produced as a social use-value, but it isn’t until we exchange it that we can really know if it is a UV or not. There is an opportunity for crisis here, and it also explains why there is such a motivation to have commodities flying off the shelves (there is less of a lag time for something to fall out of use).

“Money is a crystal formed of necessity in the course of the exchanges, whereby different products of labour are practically equated to one another and thus by practice converted into commodities” (90).

Money allows exchange to “burst local bonds.” (92) Money—Marx is referring to gold—has a two-fold character: it has a special UV and a general one (93)

Our “relations to each other in production assume a material character independent of their control and conscious individual action” (96). We are subject to forces we don’t control individually. We are, however “atomic.” He is ending this chapter like the begins the first. There is an appearance, but it’s false. We aren’t really atomized.

Chapter 3: Money

Money has three functions. First, it is a measure of value. Money – supplies commodities with the material for the expression of their values (97).

Money itself has no price.

Value of commodities is invisible—but it exists within the commodity. In order for it to be expressed, the owner of the commodity has to put a label on it and bring it to exchange.

Money has to have some material basis. It isn’t just an imaginary thing we can just stop believing in. This material basis is relative (can rise or fall).

Value is different from price. Mostly in this book Marx says things trade at their value, but here he notes there is always a difference. Value is social, price is individual. There is an incongruity here, which is useful for capitalism because it allows prices to fluctuate and is therefore highly adaptive.

Once you put a price on something, you can put a price on anything. “conscience, honour” (105).

Money is also a medium of circulation and means of payment.

M-C and C-M. A “unity of differences” (107).

There is a possibility of crisis raised on 109. “The labour-time that yesterday was without doubt socially necessary to the production fo a yard of linen, ceases to be so to-day.” This is why capitalists want circulation to happen as quickly as possible, why they want to have commodities flying off the shelves. If not, crisis.

M can become C anytime, but not always the reverse. “the course of true love never did run smooth” (109).

What sets this apart from bartering is the circuit doesn’t ever end. The M starts another circuit. “We see here, on the one hand, how the exchange of commodities breaks through all local and personal bounds… and on the other hand, how it develops a whole network of social relations spontaneous in their growth and entirely beyond the control of the actors” (114). Whether or not I can sell my commodity (labor-power) is dependent upon a host of things I have no control over.

Polemic against Say’s law (114-5). Say’s law held that every purchase is a sale and every sale a purchase, so equilibrium is possible. Marx points out this is “childish,” one can buy without selling and vice versa. “The sale and the purchase constitute one identical act” (114).

“Circulation bursts through all restrictions as to time, place, and individuals” (115). This is the second time Marx mentions this so far, and there will be more instances later. Capital is a necessarily expansive and dominating system (this in part explains imperialism).

Because of this there is always a kind of imbalance. “If the interval in time between the two complementary phases (M-C, C-M) of the complete metamorphosis become too great, if the split between the sale and the purchase become too pronounced, the intimate connexion between them, their oneness, asserts itself by producing—a crisis… These modes therefore imply the possibility, and no more than the possibility, of crisis” (115, emphasis added).

How much money do you need in circulation at any given moment? He says on p. 122, the total price of commodities in circulation times velocity. All three factors—prices, quantity of commodities, and velocity, are variable (123).

The state arises in part to regulate this. “Coining… is the business of the State.” (125) This is one example of the economic foundation and rationale for the state’s emergence and growth.

Question of credit arises on p. 127, but disappears just as quickly (this is for volume 3). This is not in the book but it is worth defining at this moment: What is credit? A claim on future value (socially necessary labor-time).

Hoarding is a necessary result of circulation—you have to sell first in order to buy. It’s insatiable by definition. Also necessary for large scale projects, production processes that are irregular or seasonal.

Again, he says, everything can have a price now, anything is exchangeable.

Possibility of contradiction here between money as measure of value and means of payment. If production and realization are separated too much in time a monetary crisis can arise. On the one hand, someone can be order to sell before they are ready to buy. It is in the interests of individual capitalists to facilitate transaction (credit).

Credit and debit arises here (135).

“The function of money as the means of payment implies a contradiction… payments balance one another, money functions only ideally as money of account, as a measure of value. In so far as actual payments have to be made, money does not serve as a circulating medium, as a mere transient agent in the interchange of products, but as the individual incarnation of social labor (137).